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Bravo! Colorado at Beaver Creek - Vail, Inc.Bravo! Colorado Music Festival Endowment Foundation

dba Bravo! Vail(Colorado Non-Profit Corporations)Consolidated Financial Statements

September 30, 2019

i

Bravo! Colorado at Beaver Creek - Vail, Inc.Bravo! Colorado Music Festival Endowment Foundation

dba Bravo! Vail(Colorado Non-Profit Corporations)

September 30, 2019

Table of Contents

Page

INDEPENDENT AUDITOR'S REPORT 1 – 2

Consolidated Statement of Financial Position 3

Consolidated Statement of Activities 4

Consolidated Schedule of Functional Expenses 5 – 6

Consolidated Statement of Cash Flows 7

Notes to the Consolidated Financial Statements 8 - 17

McMahan and Associates, l.l.c.Certified Public Accountants and Consultants

Web Site: www.mcmahancpa.comChapel Square, Bldg C Main Office: (970) 845-8800245 Chapel Place, Suite 300 Facsimile: (970) 845-8108P.O. Box 5850, Avon, CO 81620 E-mail: [email protected]

Member: American Institute of Certified Public Accountants

Paul J. Backes, CPA, CGMA Avon: (970) 845-8800

Michael N. Jenkins, CA, CPA, CGMA Aspen: (970) 544-3996

Daniel R. Cudahy, CPA, CGMA Frisco: (970) 668-3481

1

M&A

INDEPENDENT AUDITOR’S REPORT

To the Board of TrusteesBravo! Colorado at Beaver Creek - Vail, Inc.Bravo! Colorado Music Festival Endowment Foundationdba Bravo! VailVail, Colorado

Report on the Financial Statements

We have audited the accompanying consolidated financial statements of Bravo! Colorado at Beaver Creek - Vail, Inc. and Bravo! Colorado Music Festival Endowment Foundation, which comprise the consolidated statement of financial position as of September 30, 2019, and the consolidated related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

INDEPENDENT AUDITOR’S REPORTTo the Board of TrusteesBravo! Colorado at Beaver Creek - Vail, Inc.dba Bravo! VailVail, Colorado

2

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Bravo! Colorado at Beaver Creek - Vail, Inc. and Bravo! Colorado Music Festival Endowment Foundation as of September 30, 2019, and the changes in its net assets, functional expenses and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Report on Summarized Comparative Information

We have previously audited the Association’s September 30, 2018 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated February 11, 2019. In our opinion, the summarized comparative information presented herein as of and for theyear ended September 30, 2018 is consistent, in all material respects, with the audited financial statements from which it has been derived.

McMahan and Associates, L.L.C.February 29, 2020

2019 2018

Assets

Current Assets

Cash and cash equivalents 1,534,741 2,605,030

Investments at market value 6,035,211 5,335,409

Investments - Certificates of deposit 829,331 471,212

Accounts receivable, net 415,324 1,073,944

Accounts receivable, related parties (See note 11) 390,723 557,875

Inventory 5,491 4,632

Prepaid expenses 57,625 87,917

Total Current Assets 9,268,446 10,136,019

Non-Current Assets

Deferred compensation plan assets 187,576 247,439

Fixed Assets

Leasehold Improvements 178,070 178,070

Less: accumulated amortization (178,070) (156,877)

Furniture, fixtures and equipment 518,388 460,008

Less: accumulated depreciation (465,851) (434,113)

Net Fixed Assets 52,537 47,088

Other Assets

Works of art, festival piano 58,000 58,000

Total Assets 9,566,559 10,488,546

Liabilities and Net Assets

Current Liabilities

Accounts payable 131,803 146,580

Accrued expenses 251,983 242,272

Total Current Liabilities 383,786 388,852

Non-Current Liabilities

Deferred compensation obligation 187,576 247,439

Total Non-Current Liabilities 187,576 247,439

Total Liabilities 571,362 636,291

Net Assets

Without donor restrictions 4,869,465 4,778,283

With donor restrictions 4,125,732 5,073,972

Total Net Assets 8,995,197 9,852,255

Total Liabilities and Net Assets 9,566,559 10,488,546

(With Comparative Totals at September 30, 2018)

(Colorado Non-Profit Corporations)

Consolidated Statement of Financial Position

September 30, 2019

Bravo! Colorado at Beaver Creek - Vail, Inc. and Bravo! Colorado Music Festival

Endowment Foundation

dba Bravo! Vail

The accompanying notes are an integral part of these financial statements.

3

Without Donor With Donor

Restrictions Restrictions Total 2018

Revenues, Gains and Other Support

Event income 2,367,338 - 2,367,338 2,429,584

Festival contributions 3,667,639 1,042,779 4,710,418 6,103,409

Program advertising 173,752 - 173,752 153,156

Investment income 10,152 80,374 90,526 203,230

Miscellaneous income 29,481 - 29,481 30,711

In-Kind contributions 1,559,938 - 1,559,938 1,637,255

Net assets released from restrictions 2,071,393 (2,071,393) - -

Total Revenues, Gains and Other Support 9,879,693 (948,240) 8,931,453 10,557,345

Expenses

Artistic 3,964,305 - 3,964,305 3,583,052

Concert operations 875,546 - 875,546 735,879

Education 335,722 - 335,722 263,075

Marketing 438,819 - 438,819 317,039

Administrative 525,277 - 525,277 586,256

Salary, benefits and bonus 1,892,090 - 1,892,090 1,908,843

Development 196,814 - 196,814 264,003

In-Kind 1,559,938 - 1,559,938 1,637,255

Total Expenses 9,788,511 - 9,788,511 9,295,402

Change in Net Assets (Deficit) 91,182 (948,240) (857,058) 1,261,943

Net Assets - Beginning of Year 4,778,283 5,073,972 9,852,255 8,590,312

Net Assets - End of Year 4,869,465 4,125,732 8,995,197 9,852,255

Bravo! Colorado at Beaver Creek - Vail, Inc. and Bravo! Colorado Music Festival Endowment Foundation

dba Bravo! Vail


2019

Statement of Activities

For the Year Ended September 30, 2019

(With Comparative Totals for the Year Ended September 30, 2018)


4

2018

Management

Program and

Services General Fundraising Total Total

Artistic:

Artist staff 251,707 - - 251,707 228,493

Artist staff expenses 16,369 - - 16,369 33,562

Artist fees 565,463 - - 565,463 398,227

Housing 659,096 - - 659,096 617,562

Orchestras 2,471,670 - - 2,471,670 2,305,208

Concert Operations:

Chamber hall rental 12,450 - - 12,450 5,025

Gerald Ford Amphitheatre 141,978 - - 141,978 266,301

Equipment rental / sound engineer 116,002 - - 116,002 93,380

Amphitheatre screen usage 24,797 - - 24,797 -

Piano 23,909 - - 23,909 25,570

Photographer / videography 49,857 - - 49,857 50,957

Production crew salaries 75,161 - - 75,161 68,678

Concert production 284,606 - - 284,606 94,447

Operations salaries 114,912 - - 114,912 101,648

Soiree expenses 31,874 - - 31,874 29,873

Education:

Adult education 2,650 - - 2,650 2,150

Education - artist fees 55,323 - - 55,323 68,480

Family concerts 11,142 - - 11,142 10,935

Internship expenses 5,199 - - 5,199 4,242

After-School programs 15,886 - - 15,886 4,187

Education - marketing 15,040 - - 15,040 10,409

Education - administration 23,984 - - 23,984 10,891

Education salaries 206,498 - - 206,498 151,781

Marketing:

Marketing & PR projects 28,010 - - 28,010 12,583

Advertising - print 30,286 - - 30,286 25,902

Advertising - broadcast 22,487 - - 22,487 16,513

Advertising - outdoor 9,383 - - 9,383 15,381

Digital 53,029 - - 53,029 50,201

Direct response 31,381 - - 31,381 34,021

PR & content 49,647 - - 49,647 69,866

Research 7,904 - - 7,904 4,907

Hospitality 6,868 - - 6,868 296

Website design & maintenance 28,473 - - 28,473 15,668

Special marketing projects 95,860 - - 95,860 -

Festival design / collateral 75,491 - - 75,491 71,701


(continued)

2019


Statement of Functional Expenses


(With Comparative Totals for September 30, 2018)

Supporting Services

dba Bravo! Vail


5

2018

ManagementProgram and

Services General Fundraising Total Total

Development:

Donor cultivation - - 42,705 42,705 57,479

Gala dinner expenses - - 13,390 13,390 116,194

Development planning / travel - - 7,100 7,100 7,194

Donor events - - 125,769 125,769 76,270

Postage - fundraising - - 7,850 7,850 6,866

Administration:Office rent 48,246 18,954 18,954 86,154 86,154

Utilities 2,242 881 881 4,004 5,215

Postage - admin - 10,042 - 10,042 10,444

Telephone - 9,973 - 9,973 10,016

Office supplies - 18,600 - 18,600 22,056

Administrative expenses - 21,152 - 21,152 20,231

Office equipment - 19,718 - 19,718 30,313

Network licensing & maintenance 56,776 26,358 32,806 115,940 96,926

Stationery / ticket stock 1,972 4,349 3,620 9,941 7,327

Executive Director expenses - 8,877 - 8,877 8,337

Staff travel / long distance 122 5,781 3,563 9,466 25,220

Board expenses - 5,598 - 5,598 8,473

Accounting / audit - 11,426 - 11,426 10,300

Transaction / processing fees 22,236 18,168 34,484 74,888 108,340

Office maintenance / storage 4,001 9,177 - 13,178 12,914

Festival insurance policies 33,688 - - 33,688 38,018 Guild expenses 6,057 - - 6,057 7,827

Consulting fees - 13,644 - 13,644 19,631

Bank service fees - - - - -

Depreciation & amortization - 52,931 - 52,931 58,514

Salaries / Taxes:

Administrative salaries - 570,794 - 570,794 669,695

Development salaries - - 402,240 402,240 285,830

Box Office salaries 126,840 - - 126,840 123,671

Marketing salaries 220,647 - - 220,647 344,264

Employee health benefits 71,694 37,709 36,438 145,841 141,026

Retirement benefit management - 3,509 - 3,509 1,662

Employer taxes 140,296 - - 140,296 125,252

Worker's compensation - 4,879 - 4,879 6,110

Employer retirement contribution 22,660 27,016 14,433 64,109 41,551

Employee development - 20,333 - 20,333 4,057

Employee recognition 109,950 43,852 38,800 192,602 165,725

In-kind 1,559,938 - - 1,559,938 1,637,255

Total Expenses 8,041,757 963,721 783,033 9,788,511 9,295,402

Percentages 82% 10% 8% 100%

Percentages without in-kind 79% 12% 10% 100%


Supporting Services

2019

dba Bravo! Vail

(With Comparative Totals for September 30, 2018)


Statement of Functional Expenses



6

2019 2018

Cash Flows from Operating Activities

Cash received for concert tickets 2,367,338 2,675,987

Cash received for donor support 5,190,334 5,127,097

Interest and dividends received 268,147 504,790

Cash received from other sources 203,233 183,867

Cash (paid) for salaries, payroll taxes, and benefits (1,717,092) (1,745,567)

Cash (paid) to artist expenses (4,839,851) (4,318,931)

Cash (paid) for other goods and services (1,594,333) (1,567,428)

Net Cash Provided by Operating Activities (122,224) 859,815

Cash Flows from Investing Activities

Purchase of equipment (58,380) -

Sale (purchase) of investments, net of redemptions (889,685) 1,119,046

Net Cash (Used) by Investing Activities (948,065) 1,119,046

Net Increase in Cash (1,070,289) 1,978,861

Cash Balance and Cash Equivalents - Beginning of Year 2,605,030 626,169

Cash Balance and Cash Equivalents - End of Year 1,534,741 2,605,030

Reconciliation of Change in Net Assets to

Net Cash Provided by Operating Activities

Change in net assets (857,058) 1,261,943

Adjustments to reconcile:

Depreciation 31,738 36,986

Amortization 21,193 21,528

Net realized (gain) loss on investments 94,051 -

Net unrealized (gain) loss on investments 83,570 256,780

Donated securities (345,856) -

(Increase) decrease in accounts receivable 825,772 (729,913)

(Increase) decrease in inventory (859) 106

(Increase) decrease in prepaid expenses 30,292 (64,005)

Increase (decrease) in accounts payable and accrued items (5,067) 76,390

734,834 (402,128)

Net Cash Provided by Operating Activities (122,224) 859,815

Schedule of Non-Cash Activities

In-kind contribution 1,559,938 1,637,255 1,559,938 1,637,255

(A Colorado Non-Profit Corporation)

Statement of Cash Flows


(With Comparative Totals for the Year Ended September 30, 2018)

Bravo! Colorado at Beaver Creek - Vail, Inc.and Bravo! Colorado Music Festival Endowment Foundation

dba Bravo! Vail

dba Bravo! Vail


7


dba Bravo! Vail(Colorado Non-Profit Corporations)

Notes to the Consolidated Financial StatementsSeptember 30, 2019

8

1. Organization

Bravo! Colorado at Beaver Creek/Vail, Inc. dba Bravo! Vail is incorporated in the State of Colorado as a non-profit corporation. The By-Laws and Articles of Incorporation are dated December 11, 1987. Bravo! Vail began operations in 1987.

The mission of Bravo! Vail is to stimulate and foster public interest and appreciation of the performing arts, especially music, and to serve the State of Colorado and especially the Vail Valley communities of Vail, Beaver Creek and Avon through the presentation and sponsorship of musical concerts, activities, and events of the highest international standards.

2. Reporting Entity

Bravo! Colorado Music Festival Endowment Foundation (the “Foundation”) has been established and organized as a Colorado non-profit corporation and is operated at all times for theexclusive benefit of, or to carry out the purpose of, Bravo! Vail. The Foundation is managed by a Board of Directors consisting of six members. The Foundation Board is authorized to engage in professional financial management and to oversee the overall performance of the Foundation for the benefit of Bravo! Vail. Income from the Foundation may be distributed to Bravo! Vail at the discretion of the Foundation Board of Directors. The Foundation’s transactions have been presented as donor restricted on the consolidated financial statements.

3. Summary of Significant Accounting Policies

A. Basis of Accounting

These financial statements have been prepared on the accrual basis of accounting, which recognizes revenues when earned and expenses when incurred.

B. Basis of Presentation and Net Assets

Bravo! Vail reports information regarding its financial position and activities based on the existence or absence of donor-imposed restrictions. Accordingly, net assets and changes therein are classified and reported as follows:

Without Donor Restrictions – Net assets available for use in general operations and not subject to donor (or certain grantor) restrictions.

With Donor Restrictions – Net assets subject to restrictions imposed by donors orgrantors. Some donor-imposed restrictions are temporary in nature, such as those that will be met by the passage of time or other events specified by the donor. Other donor-imposed restrictions are perpetual in nature, where the donor stipulates that resources be maintained in perpetuity. Donor-imposed restrictions are released when a restriction expires; that is, when the stipulated time has lapsed, when the stipulated purpose for which the resources was restricted has been fulfilled, or both.

C. Cash and Cash Equivalents

Bravo! Vail considers all checking, savings, and money market accounts, as well as allhighly liquid investments with a maturity of three months or less when purchased, to be cash equivalents for purposes of the Statement of Cash Flows.

Bravo! Colorado at Beaver Creek - Vail, Inc.(A Colorado Non-Profit Corporation)

Notes to the Financial StatementsSeptember 30, 2019

(Continued)

9

3. Summary of Significant Accounting Policies (continued)

D. Investments

Bravo! Vail invests in marketable equity and fixed income securities which are reported on the financial statements at fair value. Net investment gain / (loss) reported in the Statement of Activities consists of interest and dividend income received, as well as both realized and unrealized gains and losses. Investment income considered to be without restrictions unless the earnings are restricted, either as to purpose or time period, by the donor of the original contribution.

E. Fair Value Measurements

The carrying amounts reported in the Statement of Financial Position for cash and cash equivalents, prepaid expenses, accounts payable and accrued liabilities approximate fair value because of the immediate or short-term maturities of these financial instruments.

Generally accepted accounting principles require that financial assets be valued at “fair value”, determined through application of a three-tiered hierarchy of input levels. Financial assets valued using level 1 inputs are based on unadjusted quoted market prices within active markets. Financial assets valued using level 2 inputs are based primarily on quoted prices for similar assets in active or inactive markets. Financial assets valued using level 3 inputs are based on the best information available in circumstances where markets are non-existent or illiquid.

F. Allowance for Doubtful Accounts

Bravo! Vail uses the allowance method for recognition of uncollectible receivables, whereby an allowance is established when collectability becomes doubtful. No allowance for doubtful accounts was required at September 30, 2019, as all amounts are considered collectible.

G. Inventory

Bravo! Vail records inventory at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method.

H. Fixed Assets and Depreciation

Capital assets are defined by Bravo! Vail as assets with an initial cost of $500 or more and an estimated useful life in excess of one year. As previously described, donated fixed assets are recorded at fair market value when received. Purchased fixed assets are recorded at historical cost.

Leasehold improvements (i.e., corporate office) are depreciated using the straight-line method, over the term of the remaining term of the underlying lease.

Fixed assets are depreciated using the straight-line method over the following estimateduseful lives:

EstimatedUseful Lives

Furniture and equipment 3 - 5 yearsWebsite 3 yearsLeasehold improvements 3 - 6 years

Asset Class


dba Bravo! Vail(A Colorado Non-Profit Corporation)


(Continued)

10


I. Support and Revenue

Contributions of cash and other assets are reported as with donor or grantor restriction ifthey are received with donor or grantor stipulations that limit or specify the use of thedonated assets, whether by time, period, or purpose. When a donor or grantor restrictionexpires – that is, when a stipulated time restriction ends or the stated purpose restrictionis accomplished – donor / grantor restricted net assets are reclassified to net assetswithout donor restriction and reported in the Statement of Activities as net assets releasedfrom restrictions. Contributions with donor restriction received and released from restrictions within the same fiscal year are reported as contributions without donor restriction.

Contributions are recognized when cash, securities or other assets, an unconditional promise to give, or notification of a beneficial interest is received. Unconditional promises to give expected to be collected within one year are reflected as current contributions and are recorded at their net realizable value. Unconditional promises to give expected to be collected in future years are initially recorded at fair value using present value techniques incorporating risk-adjusted discount rates designed to reflect the assumptions market participants would use in pricing the asset. In subsequent years, amortization of the discounts is included in contribution revenue in the Statement of Activities. Conditional promises to give are not recognized until the conditions on which they depend have been substantially met.

Non-monetary contributions of goods and services are recorded at their fair values in the period received. Donated services are recorded at their fair values in the period received,provided that such services either create or enhance non-financial assets or the servicesare considered “professional” services which the Foundation would otherwise be required to purchase. Donated fixed assets are recorded at fair value when received and reflected in these financial statements as contribution revenue and an addition to fixed assets.Nonmonetary donations are recognized as revenue and offsetting expense or asset,depending on the nature of such support received.

Program services fees received in advance are deferred to the applicable period in which the related services are performed or expenditures are incurred

J. Income Taxes

Bravo! Vail consists of non-profit organizations as described in Section 501(c)(3) of the Internal Revenue Code and is thus exempt from federal and state income taxes on income which is directly related to its organizational purpose.

Unrelated business income is income derived from a trade or business by the exempt organization that is not substantially related to the performance of the organization’s exempt purpose or function. For the year ended September 30, 2019, Bravo! Vail had no unrelated business income.

The Federal information returns of Bravo! Vail are subject to examination by the Internal Revenue Service. Bravo! Vail’s returns are no longer subject to examination for tax years prior to fiscal year 2016.




(Continued)

11


K. Functional Allocation of Expenses

The financial statements report certain categories of expenses that are attributable to one or more program or supporting functions of Bravo! Vail. These expenses include depreciation, certain personnel salaries and benefits, information technology, and utilities. Depreciation is allocated based on use of assets and location of assets. Salaries and benefits are allocated based on position or time spent on each function. Information technology is allocated based on time spent and specific technology utilized. Utilities are allocated based on location

L. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

M. Comparative Information

The financial statements include certain prior year comparative information in total, but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity to generally accepted accounting principles. Accordingly, such information should be read in conjunction with Bravo! Vail’s financial statements as of and for the year ended September 30, 2018, from which the comparative totals were derived.

N. Subsequent Events

Management has evaluated potential subsequent events prior to February 29, 2020, any such events have been included in these financial statements.

4. Investments

Investments are stated at their estimated fair values. Bravo! Vail’s investment assets are dedicated to providing the financial resources needed to meet the Bravo! Vail’s charitable objectives. Bravo! Vail’s investments are managed by an independent professional investment management firm and are held in various investment structures such as mutual funds. Investments in equity securities fluctuate in value in response to many factors; such as the activities and financial condition of individual companies, business and industry market conditions and the general economic environment. The value of fixed income securities fluctuates in response to changing interest rates, credit worthiness of issuers and overall economic policies that impact market conditions.




(Continued)

12

4. Investments (continued)

The fair values of Bravo! Vail’s investments measured on a recurring basis at September 30, 2019 were as follows:

Quoted Prices SignificantIn Active Other Significant

Markets for Observable UnobservableIdentical Assets Inputs Inputs

Fair Value (Level 1) (Level 2) (Level 3)

Investments:Certificates of deposit 829,331$ 829,331 - - Equities 2,650,159 2,650,159 - - Mutual funds and exchanged-traded funds 3,385,052 3,385,052 - -

Total 6,864,542$ 6,864,542 - -

Fair Value Measurements at Reporting Date Using

Assets with donor restrictions are held by the Foundation. The Foundation’s investment policy includes an objective to grow at a rate of 5% plus inflation as measured by CPI over a five-year period of time. The policy’s risk parameters allow for limited volatility through asset class diversification and security concentration limits. Sufficient liquidity to allow a 5% withdrawal rate of the fair market value of the portfolio is required. The policy allows for the following category allocations:

Investment Category % Range

Domestic/Global Equities 10% - 30%

International Equities 10% - 30%

Global Allocation Funds 5% - 30%

Fixed Income 10% - 40%

Diversifying Assets 0% - 20%

Real Assets/Inflation Hedges 0% - 20%

Cash & Short-term Investments 0% - 20%

The Foundation had the following investment categories at year end:

Market Value

Investment Category 09/30/19

Domestic/Global Equity 1,840,542$ International Equities 809,617 Emerging Markets 380,500 Global Allocation Funds 686,824 Fixed Income 1,974,863 Real Assets/Inflation Hedges 342,865 Certificates of Deposit 829,331

Total 6,864,542$




(Continued)

13

5. Liquidity and Availability of Resources

Bravo! Vail’s net assets consist of donor-restricted amounts and amounts without donor restrictions. Income from donor-restricted endowments is restricted for specific purposes and, therefore, is not available for general expenditures. Bravo! Vail’s investment policy and liquidity management are structured around retaining an investment portfolio with moderate growth income. The objectives of the policy are to preserve capital so that capital losses are minimized, maintain rates of return comparable to other similar investment markets, and invest in instruments that are mostly short term in nature, to ensure Bravo! Vail’s financial obligations can be met when due.

Bravo! Vail’s financial assets available within one year from September 30, 2019 for general expenditures are as follows:

Cash and cash equivalents 2,364,072$ Accounts and interest receivable 806,047 Liquid and short-term investments 6,035,211

Total 9,205,330$

6. Endowment

Net assets associated with endowment funds, including funds designated by the Board, tofunction as endowments, are classified and reported based on the existence or absence of donor-imposed restrictions. The Foundation’s endowment consists of a donor-restricted endowment to support the longevity of Bravo! Vail. The donor-restricted endowment fund corpus may not be drawn down or pledge as collateral for a loan or other liability; however, interest and other returns earned on the donor-restricted endowment fund are considered to be undesignated, and may be used for operating purposes upon approval of a two-third majority of the Foundation’s Board of Directors.

The composition of the Foundation’s endowment fund net assets by type as of September 30,2019 is as follows:

Without Donor With DonorRestrictions Restrictions Total

Board-designated endowment fund:Original Board-designated amount 179,260$ - 179,260 Accumulated investment gains 3,495,139 - 3,495,139

Donor-restricted endowment fund:Amount required to be maintained in perpetuity

by donor - 2,375,852 2,375,852

3,674,399$ 2,375,852 6,050,251




(Continued)

14

6. Endowment (continued)

Changes in the Foundation’s endowment net assets, including Board-designated endowment, during the year ended September 30, 2019 were as follows:

Without Donor With DonorRestrictions Restrictions Total

Endowment net assets - Beginning of year 3,797,218$ 2,375,852 6,173,070 Investment return, net 78,781 - 78,781 Contributions - - - Appropriation of endowment assets for

expenditure (201,600) - (201,600)

Endowment net assets - End of year 3,674,399$ 2,375,852 6,050,251

7. Office Space – Bravo! Vail Operations

Bravo! Vail entered into a lease for office space on April 1, 2009. The initial lease expired September 30, 2019, and upon execution of a second amendment, was renewed through September 30, 2024. The lease allows for one additional five-year renewal, subject to certain stipulations.

Annual lease payments under the term of the lease are as follows:

Fiscal Year Ending:9/30/2020 66,599$ 9/30/2021 68,597 9/30/2022 70,595 9/30/2023 72,593 9/30/2024 74,591

Total 352,975$

Since the inception of this lease, Bravo! Vail has incurred a total of $178,070 in leasehold improvements. Improvements are amortized using the straight-line method over the life of the current applicable lease. Amortization cost for the year ended September 30, 2019, was $35,614.




(Continued)

15

8. Classification of Net Assets and Net Assets Released from Restriction

During the year ended September 30, 2019, the following assets were released from restriction:

Purpose restrictions accomplished:Piano funding 87,250$ Choral funding 50,000 Education funding 204,090 Artistic Excellence - Specific performances 896,053 General Foundation programs and operations 834,000

Total restrictions released 2,071,393$

At September 30, 2019, Bravo! Vail had the following net assets both without donor restrictions and with donor restrictions:

Without donor restrictions:Undesignated 4,816,928$ Invested in property and equipment, net of debt 52,537

Total net assets without donor restrictions 4,869,465$

With donor restrictions:Perpetual in nature

Foundation programs and operations 2,381,153$ Purpose restrictions:

Piano funding 137,750 Choral funding 150,000 Education funding 135,094 Artistic Excellence 208,500 Specific performances 10,000 General Foundation programs and operations 699,050

Time-restricted for future periods:

General future pledges 404,185

Total net assets with donor restrictions 4,125,732$

Total Net Assets 8,995,197$




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9. In-Kind Contributions

Contributions were generally for artists' fees, housing, travel, and advertising. The contribution and related expense are included in Bravo! Vail's financial statements at fair market value. During fiscal year 2019, Bravo! Vail received the following estimated non-cash contributions of products or services:

In-Kind - Advertising donations 16,000$ In-Kind - Housing donations 337,251 In-Kind - Orchestra donations 646,250 In-Kind - Production donations 317,027 In-Kind - Other 243,410

Total 1,559,938$

10. Retirement Savings Plans - 457(b) Eligible Deferred Compensation Plan

On October 1, 2006, Bravo! Vail established a 457(b) deferred compensation plan for certain of its management employees to enable employees who become covered under the Plan to enhance their retirement security by permitting them to enter into agreements with Bravo! Vail to defer compensation and receive benefits at separation of service, and for financial hardships due to unforeseeable emergencies. Bravo! Vail pays all administrative costs associated with the plan. Withdrawals for certain events are allowed, although a penalty may be imposed by the IRS.

As of September 30, 2019, Bravo! Vail held account balances for two participants.

Matching contributions are vested based on the following vesting schedule:

After 1 year of employment - 25% vested

After 2 years of employment - 50% vested



11. Conditional Promises to Give

A private foundation (the “Donor”) has agreed to contribute $5,000,000. The funds are conditional upon their use to reimburse Bravo! Vail for artistic projects which are funded on an annual basis through a specific grant request.

Conditions on the promise require Bravo! Vail to submit a written request for funds, which include a detailed budget no later than the thirtieth (30th) day prior to the end of the preceding fiscal year. The contribution is subject to the Donor’s review and approval, including approval of the specific orchestra or other musical talent. The Donor shall disburse any approved amounts to Bravo! Vail, or to third parties on behalf of Bravo! Vail as may be appropriate, between October 1 and October 30 of the fiscal year for which the funds are being requested. Within thirty (30) days of the completion of any fiscal year in which a portion of the fund is used, Bravo! Vail is required to submit to the Donor a final project expense report and an evaluation report.




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11. Conditional Promises to Give (continued)

The pledge agreement allows funds to be requested until the earlier of (i) October 1, 2025 or (ii) the last day of Bravo! Vail’s fiscal year ending in 2026.

As of September 30, 2019, $2,615,000 of the $5,000,000 total pledge has been received. The remaining amount of the pledge has not been included as revenue in these financial statements as the donor imposed conditions have not yet been met.

12. Concentrations of Credit Risk

The Federal Deposit Insurance Corporation (“FDIC”) insures up to $250,000 per depositor at each separately chartered FDIC-member financial institution, without regard to the nature of the accounts. At September 30, 2019, $841,772 of Bravo! Vail’s cash and cash equivalents were not covered by FDIC insurance.

The Securities Investor Protection Corporation (“SIPC”) protects against the loss of cash and securities held by a customer at SIPC-member brokerage firms up to $500,000; including up to $250,000 in cash. At September 30, 2019, $5,955,443 of Bravo! Vail’s cash and investments were not covered by SIPC insurance.

13. Related Party Transactions

From time to time Board, advisory, and staff members of the Organization make contributions. At year end $29,000 in unrestricted pledges and $361,723 in temporarily restricted pledges were receivable from these individuals.

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